Court

[captainflank]

Hi all! So glad to find this forum. I'm new to this so I don't know if I'll get all the terminology right.

My closest friend was involved in a car accident. She didn't appear at her court date (improperly served subpoena or something?) and was found responsible for the defendant's medical expenses. This amounts to around $30k. As far as I know, alcohol was not a factor.

I feel sorry for her because she herself landed in a wheel chair for 6 months when hit on her bicycle and received no compensation. The victim in the incident she's to pay damages for was not hurt so badly as that. It is objectively unfair, but at this point, there's no legal recourse.

I encouraged her to pursue legal help, potentially towards declaring bankruptcy as she is low income (around $20k yr reportable). Unfortunately, I heard it rumored that many debts, including some court ordered payments, cannot be dismissed under Chapter 7.

Obviously, consulting a lawyer is the best first step. But does anyone know off hand whether this is a good candidate for bankruptcy? If so, should she be agressively paying credit card debt (about $3k) right now, or wait to see if these might be reduced by the court as well. Would dismissal or a long-range payment plan seem more likely to result?

Thanks in advance!

[yoyoma51]

My understanding is that while most debts can be discharged under a chapter 7, debts/judgments incurred as a result of personal injury or death caused by you (or where you were deemed 'at fault') cannot be discharged.

There are other exceptions of non-dischargeable debts, also.

[jp2861]

Hard to tell if shes a good candidate or not. What does her credit look like and how much other debt does she have? This is just my opinion, but if someone can get themself out of debt in 5 years and still live a decent lifestyle, I wouldn't file.

As far as the accident, as long as she wasn't found to be malicious, willful or intoxicated, she can discharge it.

[captainflank]

I guess in my opinion the credit debt is not substantial (based on her salary). That alone didn't seem like a motivating factor. I just didn't want her to focus on correcting that if she was going to file bankruptcy soon.

The court ordered payments are probably out of reach for her. Though, I wonder if they negotiate assistance or payment plans. If it is the case that she could get a dismissal of the medical bills for which she was held responsible, that would be worth investigating further I suppose.

I recently discovered a document indicating that "court ordered resitution" was non-dismissable. I wonder if that applies only to willful or negligent behavior as you mention.

[dpickrn]

I was in a similar circumstance. My debt was discharge. I think the key is that it wasn't alcohol or drug related. If your friend files, make sure she includes the individuals, their insurance company and the court that placed the judgment. The other people's insurance company may try to sue if they pay out an underinsured motorist claim.

This is from the back page of my discharge:

Debts that are Not Discharged

Some of the common types of debts which are not discharged in a chapter 7 bankruptcy case are:

a. Debts for most taxes;
b. Debts incurred to pay nondischargeable taxes; applies to cases filed on or after October 17, 2005.
c. Debts that are domestic support obligations;
d. Debts for most student loans;
e. Debts for most fines, penalties, forfeitures, or criminal restitution obligations;
f. Debts for person injuries or death caused by the debtor's operation of a motor vehicle, vessel, or aircraft
while intoxicated;
g. Some debts which were not properly listed by the debtor;
h. Debts that the bankruptcy court specifically has decided or will decide in this bankruptcy case are not
discharged;
i. Debts for which the debtor has given up the discharge protections by signing a reaffirmation agreement in
compliance with the Bankruptcy Code requirements for reaffirmation of debts.
j. Debts owed to certain pension, profit sharing, stock bonus, other retirement plans, or to the Thrift Savings
Plan for federal employees for certain types of loans from these plans. Applies to cases filed on or after
October 17, 2005.

Hope this is helpful!

[FreshLikeADaisy]

Captainflank, I don't know if this makes you feel any better, but Mike Nifong, the errant prosecutor in the Duke Lacrosse case, has now filed Chapter 7 to get out of the eventual judgements from the civil lawsuits. I looked up his filing on PACER; he has every single team player, their attorneys, and many Duke personnel listed as "unsecured debt", most with $1.00 by their names... just in case they sue.

Jp and dpickrn had it right; your friend's debt -- if no alcohol or drugs were involved -- is probably dischargeable. Your friend needs an attorney, though. It would be well worth it to get some of those free consults and see what a local attorney has to say about her situation. Good luck!!!